(CN) – Mick Mulvaney, director of the Office of Management and Budget, continued to scale back regulatory efforts in the finance industry, so the Center for Responsible Lending held a media call Wednesday to address how Mulvaney’s actions within the Trump administration could affect regulation of the payday lending industry.
The conference, hosted by the Center for Responsible Lending and Americans for Financial Reform, primarily addressed their assertion that Mulvaney “has turned the [Consumer Financial Protection Bureau] away from its mission of protecting families from abusive financial practices,” including Mulvaney’s backtrack on the Equifax probe, according to a press release Tuesday.
Senator Elizabeth Warren, D-Mass., who initially proposed and helped launch the agency, also weighed in on the Reuters report on Twitter Tuesday, calling the move a “middle finger” to 145 million consumers.
In a subsequent tweet, Senator Warren encouraged lawmakers to pass a bill that she and Senator Mark Warner, D-Va., proposed regarding penalties for credit bureaus, because “we can’t rely on bought-and-paid-for” Mulvaney to investigate Equifax, she said.
In response to the new report on the Equifax probe, the Center for Responsible Lending asserted that Mulvaney has received $11,000 in campaign donations from the credit bureau, as well as other donations from payday lenders, according to the press release.
The Center for Responsible Lending is a 501(c)(3) nonprofit organization dedicated to protecting “homeownership and family wealth by fighting predatory lending practices,” according to its website. Americans for Financial Reform is a project led by the Leadership Conference Education Fund, another 501(c)(3) organization dedicated to ending the “casino economy” on Wall Street and advocating for transparency in the financial market, according to its About page.
The groups’ call to action comes upon news that Mulvaney has scaled back the probe into Equifax’s data breach last year after the previous director, Richard Cordray, resigned as the head of the CFPB.
Since the probe began, Mulvaney has not ordered any subpoenas against the credit bureau, and the CFPB “has shelved plans for on-the-ground tests of how Equifax protects data,” according to a report from Reuters on Monday.
The Office of Management and Budget could not immediately be reached for comment.
Guest speakers, including Senator Jeff Merkley, D-Ore., Rev. Willie Gable Jr. with the Progressive Baptist Church in New Orleans, Yana Miles with the Center for Responsible Lending and Jose Alcoff with Americans for Financial Reform, criticized Director Mulvaney’s lack of effort regarding payday loan regulations, a key authority within the CFPB.
Instead, Senator Merkley said that Mulvaney has turned the CFPB under his authority into the “corporate financial protection bureau” by refusing to regulate payday lenders more comprehensively.
Senator Merkley elaborated by explaining that some of his constituents took out these types of loans to pay for prescription drugs, and they eventually had to declare bankruptcy because they could not overcome large spikes in their principle balances, which often come after only two weeks.
Rev. Gable also lamented payday lending interest rates, which were averaged to 391 percent in Louisiana. Gable likened these types of loans to “financial quicksand” and “legalized loan sharking.”
Gable also mentioned that one quarter of loan recipients in Louisiana are on some form of public assistance, and nearly all recipients were low-income workers. When asked about the optics of people in safety net programs taking out payday loans, Gable said that it was a “misconception that people are buying flatscreen TVs with loan funds.”
Instead, Gable said that these lending practices were “designed to target the poor.”
Miles later added that these lending practices, paired with lack of regulatory vigor in the CFPB, could lead to another financial crisis, which “we simply cannot afford.”
The speakers collectively characterized Mulvaney’s CFPB as an agency largely disinterested in regulating major sectors of the financial industry with direct effects on consumers.
Senator Merkley was able to impose new reforms on the payday lending industry in Oregon, he said, but such reforms would only affect Oregonians.
Merkley broadly encouraged others to “fight back” against predatory lending practices.